Goldman Sachs Group slashes quarterly profit 85% with 1MDB legal charge

Goldman Sachs Group boosted litigation reserves by $2.01 billion after agreeing with Malaysia to resolve probes into the US bank’s role in a scheme to plunder the nation’s 1MDB investment fund.

The additional provision cut the firm’s previously announced second-quarter profit by 85 per cent, the bank said Friday in a filing. Goldman said last month that the Malaysia settlement would “materially increase” the $945 million it had already set aside in the quarter.

The charge wipes out what had been a surprise jump in profit fueled by trading gains, but it also marks progress in the investment bank’s efforts to resolve